NEW YORK, Nov. 10, 2020 /PRNewswire/ -- Pareteum
Corporation (Nasdaq: TEUM), a global cloud communications
platform company, today issued an open letter to shareholders.
Dear Shareholders,
Earlier today we issued a press release announcing the delisting
of Pareteum's common stock from Nasdaq due to the Company's
inability to file its delinquent Quarterly Report for the period
ended September 30, 2019, its amended
Annual Report for the year ended December
31, 2018, its Annual Report for the year ended December 31, 2019 or its Quarterly Reports for
the periods ended March 31, 2020 and
June 30, 2020 by the deadline set by
Nasdaq. We understand and share the disappointment in this
announcement and it is our firm intent to complete the
restatements, and relist on Nasdaq or another national securities
exchange at the earliest opportunity. For the time being, we expect
our common stock to be quoted for trading on the OTC Pink
Market.
We would also like to share with you more information and
provide an update on recent progress we have made at the Company
including business highlights, the completion of our internal
investigation and resulting actions, an update on the schedule for
the restatement process we announced in the fourth quarter of
2019, as well as plans for our listing status. We greatly
appreciate your patience and understanding as we are working
through this important process.
Restatement & Listing Update
Pareteum has been diligently working to complete its financial
restatement for the full year ended December 31, 2018, the interim periods within
fiscal year 2018 and the interim periods ended March 31, 2019 and June
30, 2019. The decision to restate these financial statements
was based on the Company's previously announced conclusion that
certain revenues recognized during 2018 and 2019 should not have
been recorded during those periods.
We are proceeding as expeditiously, and thoroughly, as possible
to complete the restatement and we expect to complete this process
and file all restated financial information on or before
December 31, 2020. The Company also
plans to become current with respect to the filing of its financial
results for the first three quarters of fiscal 2020 within a few
weeks of filing our Annual Report on Form 10-K for the 2019 fiscal
year.
Due to the comprehensive internal investigation which was
conducted between January and July this year, and the increased
level of review required to be performed by our auditors, Baker
Tilly (formerly Squar Milner, LLP), the audit has taken longer than
expected. The restatement is, however, nearing completion, and
tremendous progress has been made, although it is imperative to
allow sufficient time to ensure the completeness and integrity of
our financial results. As we approach completion, the Company
intends to provide additional periodic updates.
The Audit Committee, with its independent legal counsel and a
separate, independent accounting firm, has completed its internal
investigation in relation to the circumstances giving rise to the
restatement. As a result of the investigation, the Company
has instituted, and will continue to implement and evaluate,
additional remedial measures and internal controls to ensure that
we have the right processes, people and discipline in place.
Pareteum's Board and management is committed to ensuring that we
maintain the highest governance standards and is actively working
to deliver long-term, sustainable, shareholder value. We are
diligently working to return to a normal quarterly reporting
cadence as soon as possible. We believe the processes we are
implementing will significantly improve Pareteum's oversight,
control functions and corporate governance, and help strengthen the
business platform for sustainable growth.
As a further result of the ongoing restatement, Pareteum has
implemented and plans to add additional expertise to senior
level management and the Board of Directors, as well as
continuing to invest in growth initiatives while remaining vigilant
on optimizing our cost structure.
As stated in a separate press release today, the company's
securities are being delisted from Nasdaq due to the delinquent
filings, effective November 12, 2020.
The Company's common stock is expected to trade on the OTC Pink
Market. In view of the company's desire to relist as quickly as
possible on Nasdaq or another national securities exchange, the
Company intends to maintain and continue to improve its current
levels of financial and internal controls, to make relisting as
smooth and efficient as possible.
Upon completion of the restatement, the Company plans to hold a
shareholder meeting and apply for relisting on Nasdaq or another
national securities exchange.
Business Update
We believe that the fundamentals of our business are strong and
we are focused on executing on our product roadmap including the
introduction of new features on our platform and helping our
customers scale and deliver a combination of mobility, customer
engagement, and messaging services. We continue to see strong
interest in our offerings, and we are adding new partners and
subscribers to the platform globally, while expanding our footprint
within our existing customer base. The Company's leadership remains
focused on operationally and financially running the company and,
more importantly, working diligently to drive our strategy forward
and capitalize on the global growth opportunities.
A number of our recent customer and business updates follow.
We announced this summer our expanded partnership with Liberty
Global, a multinational telecommunications company, to build a
pan-European Voicemail platform. Leveraging the Pareteum Experience
Cloud Voicemail solution, Liberty Global's new platform will be
available to its entire European customer base. Our voicemail
solution will provide Liberty Global with the flexibility and
scalability to deliver their services and is the next step in our
long-standing relationship.
Earlier this year, we extended and expanded our contract with
Vodafone to provide it with increased operational control over
certain legacy hardware assets, together with a long-term license
to use our proprietary solutions in Spain, as well as ensuring that Pareteum
remains the exclusive provider of the managed services needed to
operate the platform through at least 2023. We believe that this is
another strong example of how Pareteum enables communications
leaders to deliver connectivity services under one platform on a
global basis, and we look forward to continuing our relationship
with Vodafone.
In September, we announced our partnership with Strattner
Technologies to launch the Strattner Voice brand, a GSM cellular
network complementing its satellite communications network
Strattner.Space. Strattner will utilize Pareteum's
Experience Cloud platform to enter the mobile communications market
with the mission to reconnect Americans with their friends, family
and business associates both in the US and across the world, in
these pandemic times. This partnership demonstrates that the
Pareteum Experience Cloud provides the flexibility and scalability
to power a diverse range of services that will enable Strattner to
enter the mobile communications market.
Also in September, we launched Pareteum SmartSIM, a
multi-country, multi-network cellular data connectivity solution
for IoT and mobile broadband use cases. SmartSIM is a single
SIM solution that works across a global footprint for cellular data
connectivity on 3G/4G/LTE-M and NB-IoT networks. The solution
facilitates seamless inventory management and logistics and can be
fully managed and controlled remotely with a setup that provides
the best connectivity experience irrespective of where it is used
globally.
We also continue to recruit talent at the executive level, while
we remain focused on investing to improve our customers'
experience, position them for growth and enable them to meet their
increasing competitive requirements for global connectivity and
collaboration.
Enhancing the Board and Senior Leadership
We have substantially strengthened the Pareteum management team
and Board, improved controls and coordination within the Company,
and enhanced our governance. Since October 2019, we have made the following updates
to our leadership team:
- A splitting of the roles of Chair and CEO, with Bart Weijermars
serving as Interim CEO and Mary Beth
Vitale appointed Non-Executive Interim Chair of the
Board.
- Bart Weijermars was appointed Interim CEO and Laura W. Thomas was appointed Interim CFO.
- The Board has established a new Business and Strategy
Committee, chaired by Independent Director Luis Jimenez-Tuñon, to
re-align the Company's strategic priorities for 2020 and
beyond.
- We are working with Heidrick & Struggles to identify
executives to complement existing talent and enhance the executive
leadership as Pareteum focuses on operational excellence.
- Hired a Director of Internal Controls, reporting directly to
the audit committee.
- Pareteum added significant new resources to strengthen our
finance team.
The leadership transition was a key step as we worked to
complete the restatement process and improve the Company's
financial and operational controls.
We believe the strengthened leadership team and Board of
Directors has significantly improved Pareteum's oversight and
control functions enabling tighter day-to-day running of
operations. We also believe that these changes have reinforced the
Company's foundation for value creation and have set the stage for
future opportunities.
Balance Sheet & Financing
Over the past year we have successfully raised $20.4 million in additional capital and our cash
position remains adequate. Additionally, we are in close
communication with our senior lender.
Moving Forward
In summary, despite this week's disappointing news, we have
achieved many positive milestones including substantially
restructuring our management team and board of directors, adding
and activating new customers, continuing to build out the
wider Pareteum team and implementing additional governance best
practices oversight and control measures.
Our industry and competitive landscape are in the midst of a
digital transformation, indeed a revolution. Cloud-based
technologies are helping customers reimagine their commercial
models in ways that will affect global demand for our offerings in
the future. Our products today have significant traction in the
market and we are seeing continued momentum, despite the unexpected
impacts of the Covid-19 pandemic this year. Pareteum is making
solid progress and operating efficiently and safely during
difficult times brought on by the pandemic. We are
laser-focused on continuing to grow and scale the business and are
committed to upholding the highest standards throughout our
operations.
We will continue work towards completing the restatement and
implementing measures to improve day-to-day operations, create a
stronger company and deliver long-term value for shareholders. We
are well positioned to capture the large opportunity in this
disruptive and growing global marketplace.
I would like to thank you for your continued support of
Pareteum. Additionally, we would like to thank our employees, and
their families, for their extraordinary contributions during what
has been a challenging time for the company and in consideration of
the pandemic. We will remain forthright and transparent and will
continue updating you on the trends we observe and the progress of
our business.
Stay safe and healthy.
Mary Beth
Vitale
|
Bart
Weijermars
|
Interim Chair of the
Board
|
Interim Chief
Executive Officer
|
About Pareteum Corporation
Pareteum is an experienced provider of Communications Platform
as a Service solutions. Pareteum empowers enterprises,
communications service providers, early stage innovators,
developers, IoT, and telecommunications infrastructure providers
with the freedom and control to create, deliver and scale
innovative communications experiences. The Pareteum
platform connects people and devices around the world using
the secure, ubiquitous, and highly scalable solution to deliver
data, voice, video, SMS/text messaging, media, and content
enablement. For more information please
visit: www.pareteum.com.
Forward Looking Statements
This letter includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. With the exception of
historical matters, the matters discussed in this letter are
forward-looking statements. We have based these forward-looking
statements on our current expectations and projections about future
events. Forward-looking statements are generally
identified by words such as "believe," "expect," "anticipate,"
"intend," "estimate," "plan," "project," "should," "will," "would"
and other similar expressions. In addition, any statements that
refer to expectations or other characterizations of future events
or circumstances are forward-looking statements. The statements
that contain these or similar words should be read carefully
because these statements discuss our future expectations, contain
projections of our future results of operations or of our financial
position, or state other "forward-looking" information. However,
our actual results may differ materially from those contained in,
or implied by, these forward-looking statements. Factors that
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to: risks
and uncertainties associated with the integration of the assets and
operations we have acquired and may acquire in the future; our
possible inability to generate additional funds that will be
necessary to expand our operations; our potential lack of revenue
growth; the length of our sales cycle; risks from the quoting of
our common stock on the over-the-counter markets; pending or
investigations by the SEC and other lawsuits; the outbreak and
impact of the novel coronavirus (COVID-19) on the global economy
and our business; our potential inability to add new products and
services that will be necessary to generate increased sales; our
potential inability to develop and successfully market platforms or
services or our inability to obtain adequate funding to implement
or develop our business; our ability to successfully remediate the
material weakness in our internal control over financial reporting
within the time periods and in the manner currently anticipated;
the effectiveness of our internal control over financial reporting,
including the identification of additional control deficiencies;
risks related to restrictions and covenants in our convertible debt
facility that may adversely affect our business; our potential loss
of key personnel and our ability to find qualified personnel;
international, national regional and local economic political
changes, political risks, and risks related to global tariffs and
import/export regulations; fluctuations in foreign currency
exchange rates; our potential inability to use and protect our
intellectual property; risks related to our continued investment in
research and development, product defects or software errors, or
cybersecurity threats; general economic and market conditions;
regulatory risks and the potential consequences of non-compliance
with applicable laws and regulations; increases in operating
expenses associated with the growth of our operations; risks
related to our capital stock, including the potentially dilutive
effect of issuing additional shares and the fact that shares
eligible for future sale may adversely affect the market for our
common stock; the possibility of telecommunications rate changes
and technological changes; disruptions in our networks and
infrastructure; the potential for increased competition and risks
related to competing with major competitors who are larger than we
are; our positioning in the marketplace as a smaller provider;
risks resulting from the restatement of our financial statements
for the years ended December 31, 2018
and the interim periods contained therein; and those risks listed
in the sections of our most recently filed annual report entitled
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations". All forward-looking
statements included in this letter are based on information
available to us on the date of this letter. Except to the extent
required by applicable laws or rules, we undertake no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
Media Inquiries
Press@pareteum.com
Pareteum Investor Relations Contacts:
Investor
Relations +1 (646) 975-0400
Investor.relations@pareteum.com
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SOURCE Pareteum Corporation